Assume that motor vehicle purchased for RM 80,000 on January 2015 and depreciated at 20% per year using reducing balance. b) Prepare i) Motor Vehicle Account ii) Statement of Comprehensive Income for the year ended 31 Dec 2018 iii) Accumulated Depreciation Account
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Assume that motor vehicle purchased for RM 80,000 on January 2015 and
per year using reducing balance.
b) Prepare
i) Motor Vehicle Account
ii) Statement of Comprehensive Income for the year ended 31 Dec 2018
iii)
Step by step
Solved in 2 steps
- Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000b. The following are balances brought forward from 31 December 2018 for KC Deco Center : RM RMMotor Vehicles 100,000Less : Provision for depreciation (20,000)80,000The motor vehicles were depreciated at 15% per annum using reducing balance method. KC bought a new vehicle on 1 October 2019, cost of the new vehicle was RM120,000. You are required to prepare the following accounts for financial year ending 31 December 2019 :i. The Motor Vehicle Accountii. The Provision for Depreciation AccountThe Statement of Financial Position of Hawkeye as at 30 June 2022 showed the following assets and liabilities: 2022 $ Assets Cash Accounts receivables Allowance for doubtful debts Inventory Rent Receivable Plant Accumulated Depreciation - Plant Deferred Tax Asset Liabilities Accounts Payable Unearned rent revenue Provision for annual leave Deferred Tax Liability Additional information 15 000 30,000 (3,000) 13,500 7,000 100,000 (40,000) ? 19,000 5,000 2,500 ? 2021 $ 12 500 40,000 (5,000) 10,500 7,500 100,000 (30,000) 3,400 16,000 3,500 2,000 5,200 a. Accumulated depreciation of plant for tax purposes was $55,000 as at 30 June 2022. b. The tax rate is 30%. Required Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts as at 30 June 2022.
- Non-current assets Property, plant and equipment Development Expenditure Current assets Inventories Trade receivables Investments Cash Total assets Equity Share capital-$1 Ordinary shares Share premium Revaluation surplus Retained Earnings Non-Current liabilities 12% Debentures Finance Lease Liabilities Deferred Tax Current Liabilities Trade payables Finance Lease Liabilities Current Tax Debenture interest Bank overdraft Total equity and liabilities 2018 $'000 925 290 1,215 360 274 143 29 806 2021 500 350 160 229 1,239 150 100 48 298 274 17 56 132 484 2,021 2017 $'000 737 160 897 227 324 46 117 714 1611 400 100 60 255 815 100 80 45 225 352 12 153 54 571 1,611The income statement disclosed the following items for the year: Depreciation expense $40,700 Gain on disposal of equipment 23,760 Net income 254,700 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,340 Inventory (3,610) Prepaid insurance (1,350) Accounts payable (4,300) Income taxes payable 1,350 Dividends payable 950 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: Net cash flows from operating activities b. Why is net cash flows from operating activities different than net income? Cash flows…Balance at the end of the financial year: 28 February 2022. Vehicles R600 000 Accumulated depreciation R250 000. Adjustment: Depreciation is calculated at 10% on cost. An old vehicle was disposed on 31 August 2021 for R21 000 cash. The vehicle originally costed R25 000 and the Accumulated depreciation for previous years is R 3 000. Profit/loss for the disposed vehicle is: O A. Profit/loss R3 000 O B. Profit/loss R500 O C. Profit/loss R1 250 O D. Profit/loss R250
- The income statement disclosed the following items for the year: Line Item Description Amount Depreciation expense $43,900 Gain on disposal of equipment 25,610 Net income 292,200 The changes in the current asset and liability accounts for the year are as follows: Line Item Description Increase (Decrease) Accounts receivable $6,840 Inventory (3,890) Prepaid insurance (1,460) Accounts payable (4,640) Income taxes payable 1,460 Dividends payable 1,020 Question Content Area a. Prepare the "Cash flows from (used for) operating activities" section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. blankStatement of Cash Flows (partial) Line Item Description Amount Amount Cash flows from (used for) operatingactivities: $Net income Adjustments to reconcile net incometo net cash flows from (used for) operating…This year Last year 1050 Assets Cash 1530 Marketable securities Accounts receivable Inventories Total current assets 1810 1220 2050 1770 2900 2790 8290 6830 Gross fixed assets 29480 28090 Less: Accumulated depreciation 14680 13140 Net fixed assets 14800 14950 Total assets Liabilities and Stockholders' Equity 23090 21780 Accounts payable Notes payable Accruals 1560 1540 2760 2160 190 350 Total current liabilities 4510 4050 Long-term debt Common stock Retained earnings Total stockholders' equity 5220 4970 9950 9950 3410 2810 13360 12760 Total liabilities and stockholders' equity 23090 21780On January 1, 2023, a machine was purchased for $105,000. The machine has an estimated salvage value of $6,420 and an estimated useful life of 5 years. The machine can operate for 106,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2023, 21,200 hours; 2024, 26,500 hours; 2025, 15,900 hours: 2026, 31,800 hours; and 2027, 10,600 hours. Compute the annual depreciation charges over the machine's life assuming a December 31 year-end for each of the following depreciation methods. (Round rate per hour to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 1. Straight-line Methodi $ 2. Activity Method Year 2023 2024 2025 $ 19,716 19,716 24,645 14,787
- Do parts a to d Accounting for Income Taxes Yoda Company is in the process of accounting for its income taxes for the year ended December 31, 2020. The following information came from Yoda's accounting and taxation records: Accounting income before income taxes for 2020 $ 98,967 Depreciation expense for property, plant, and equipment for 2020 $ 222,227 Capital cost allowance to be claimed on Yoda's 2020 income tax return $ 244,450 Book value of property, plant, and equipment at December 31, 2019 $ 1,399,268 Undepreciated capital cost of property, plant, and equipment at December 31, 2019 $ 1,203,370 Assume that there were no additions or disposals of property, plant, and equipment during 2020. In 2020, Yoda began offering a 1-year warranty on all merchandise sold. Following are details pertaining to this warranty: Warranty expense for 2020 for accounting purposes $ 38,860…Question 1 Glowing Incorporation closes its accounts on March 31 annually. Below is an extract of its balance sheet as at March 31, 2014. Non-Current Assets Useful Life Net Book Value Residual Value Buildings 40 Years $2,000 Machinery 10 Years $53,626 $6,500 (130,000 machine hours) Fixtures and Fittings 8 Years $30,600 $4,250 It is the policy of the company to charge depreciation expense as follows: Buildings Straight Line Method Machinery Units of Activity Method Fixtures and Fittings Declining Balance Method Additional information: 1. The assets above were purchased as follows: Non-Current Assets Date of Purchase Purchase Price Buildings April 1, 2010 $80,000 Machinery January 31, 2011 $65,000 Fixtures and Fittings May 1, 2013 $34,000 2. Actual machine hours used in the production process is 4,200 hoursThe income statement disclosed the following items for the year: Depreciation expense $53,200 Gain on disposal of equipment 31,010 Net income 419,900 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $8,280 Inventory (4,710) Prepaid insurance (1,770) Accounts payable (5,610) Income taxes payable 1,770 Dividends payable 1,240 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.